When you start a new job, alongside a variety of other documents, you’ll need either a P45 or P46 form. You’ve undoubtedly heard of these forms, but how much do you really know about them? What information is on these forms, and are you certain which one you should be providing? If you’re not sure, don’t panic - we’ve provided a handy guide below to help you get to grips with these important forms!

What is a P45 Form?

A P45 is essentially a form that lets your new employer know details about your taxes, such as how much taxable income you’ve paid, how much has been deducted, and your tax code. While this may not sound very exciting, it’s essential that your new employer has this information, as errors in tax could mean you underpay or pay too much, and could end up having to set up an arrangement to rectify the error later down the line.

There are four parts to a P45 - the first part will be sent to HM Revenue and Customs (HMRC) by your previous employer, and the second part is a copy of this section, which you’ll keep. The final two parts will be given to your new employer, or you’ll need to show them to Jobcentre Plus if you’re claiming Job Seekers Allowance (JSA).

What is a P46 Form?

If you don’t have a P45 for whatever reason, you’ll need to provide your new employer with a P46 instead. Like a P45, this form ensures that you are paying the correct amount of tax, and will contain details such as your tax code. 

If you don’t pass along either of these forms to your new employer, generally this means you’ll be taxed at an emergency rate. In most cases, this will result in you overpaying on your monthly income tax. Though you’ll be able to claim back the money you overpaid, as you’ll have just started a new job, you may find that your finances are a bit stretched!

Why is a P45 So Important?

The main reason a P45 is so important is that it guarantees you’re paying the right amount of income tax, and that you won’t be put on an emergency tax code. But there are a number of other uses for a P45, which you may not have previously considered. For instance, you might need to refer to your P45 when withdrawing money from your pension, to ensure you're not overcharged on tax. Or if you’re claiming benefits when out of work, you’ll need your P45 to complete a tax return.

It’s good to bear in mind that a P45 doesn’t last forever - it’s only valid for the tax year in which it is provided. Though this doesn't mean that you should dispose of it as soon as this time period is up - technically, HMRC has the right to carry out tax investigations 20 years after the tax year in question!  

filling in paperwork at the office

When Do You Need a P46?

As mentioned above, you’ll need a P46 form if you’re unable to provide a P45. This will typically be because your last employer has not passed on your P45, or you’re starting your first job. But you may also need a P46 if you have taken on a second job.

Unlike a P45, a P46 form won’t be filled out on your behalf, so if you do need this form, it’s your responsibility to provide your employer with one. And if you’re unsure whether you need to complete a P46, you can check with the HR department at your new place of employment.

How Do I Get a P45 or P46?

When you leave a job, a P45 should be automatically provided, usually on your final day of employment. But there is not a legal timescale for issuing a P45 - companies are simply instructed to do so ‘without reasonable delay’. This can mean that you need to chase it up!

In terms of getting a P46, if you haven’t been able to provide your new employer with a P45, they should give you a P46 to complete. Once you have filled in the required information, the form will be passed on to the tax office, and HMRC will calculate your income tax.

What Other Documents Do I Need?

You don’t just need a P45 or P46 when you start a new role - you’ll also need various other documentation. This may include:

  • A form of ID, such as your passport or driving license
  • Your National Insurance number
  • Proof of address, such as a recent bill or bank statement 
  • Your bank details, so that your wages can be paid into this account

To make the induction process as easy as possible, it’s a good idea to bring all these documents with you on your first day, so that they can be recorded in your file. And that way you can just concentrate on enjoying your first day in your new job!

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